Grid Net wants to win friends and then influence people.
The startup -- which has created software that it says can serve as a network operating system for utilities -- is in the midst of lining up alliances with a variety of equipment manufacturers and service providers. And when it gets a critical mass of partners, the software will be more attractive to utilities contemplating what to use for a smart grid backbone.
Expect to see announcements over the next 90 days, says Andres Carvallo, Grid Net's chief strategy officer and the former CIO at Austin Energy. (Carvallo will speak at The Networked Grid sponsored by Greentech Media taking place on May 18 and 19 in Palm Springs.)
"All of my friends from the Pecan Street project [Austin Energy's smart grid project] are all on my speed dial," he said. "Over time, you will see an ecosystem emerge."
Intel and Cisco are investors in Grid Net, he added. Johnson Controls and Honeywell, the two leaders in building management, also participated in the Pecan Street project. General Electric, an investor, already resells meters based around Grid Net's technology.
"It is a platform to build other applications on top of," he said. "We're just a software company making the intelligence for the network."
The emphasis on a network operating system is a slight shift for Grid Net. The company has been heavily associated with the WiMax meters it has designed. WiMax, however, has been the next big thing since the early part of the decade. By putting more emphasis on the operating system that connects devices, Grid Net can position itself as a behind-the-scenes software vendor that is largely agnostic to the communications protocol being used, as long as it's broadband.
Grid Net won't compete with equipment makers, he emphasized. Instead, Grid Net will liberally license its hardware reference designs for free, along with the attendant software, to equipment makers. It will then earn its revenue when utilities take per-meter licenses for the software. Have a million meters? Buy a million-seat license of the software for your service territory, Mr. Utility, and choose from a menu of equipment with which to run it, the theory goes.
"You can buy ten of this from this guy, 100 from this guy -- and they will all work," he said.
By contrast, Silver Spring Networks, one of Grid Net's competitors, sells hardware, he argued.
No interview with Grid Net would be complete without a few comments dinging mesh networking, the low-bandwidth/low-power/low-cost protocol employed by Silver Spring or other vendors using the technology. Over a ten-year period, broadband smart grids will cost 50 percent less when all costs are considered than mesh networks, he said, even though the broadband meters themselves cost more.
"There are so many hidden costs when it comes to running a smart grid network," he said. Mesh has been popular largely because utilities have allowed the meter shops inside their organizations to make the decisions so far, Carvallo argued.
"Why would you build a smart grid -- not to say anything derogatory -- using the equivalent of a 56-kilobyte-per-second AOL dial-up connection when you have access to new broadband? Why would you spend so many millions of dollars building a network that is dead on arrival?" he added.
Silver Spring for its part generally answers Grid Net's criticisms by noting that it has landed large deals with PG&E and others. Grid Net's biggest project to date is with SP Ausnet in Australia. GE also has a trial in Michigan. But again, as all things in smart grid, we're only at the beginning.
Other notes from Carvallo:
--Moore's Law, the famous dictum that says processors will drop in price and improve in performance on a fixed cycle, will allow the company to drop its prices over time. Its first WiMax meters cost around $500, which soon dropped to $350.
"We are about to release a third product that will be on parity with RF mesh meters," he said. "In three years, the cost curve has gone from 500 bucks to 100 and something. And next year it will be sub what that is."
--Utilities will use broadband networks in a variety of ways and ideally devise services -- car charging management services, demand response services, real time video services for repair personnel, etc. -- to load up on top of them.
--Telecom carriers will take out licenses, too. Some in Australia already offer energy along with cell phone and TV service.
"It is my prediction that you will see telecom carriers, private and public, that want to be in the smart grid space and that want to license Grid Net software," he said. "The rival today is the legacy of how things have been done."
--Grid Net is not wedded to WiMax, Carvallo added. The company's software will work with the variety of broadband protocols. Even ClearWire, the big WiMax promoter, has indicated it will offer LTE, a fourth-generation broadband system.